The unsatisfied debenture that stalls a term sheet

What an associate sees

Companies House publishes every charge registered against a company — debentures, mortgages, fixed and floating charges securing bank loans, government-backed lending, invoice financing and the like. Each one is marked either outstanding or satisfied. An analyst checks this list early, because a charge is a claim on your assets that can sit ahead of a new investor if things go wrong.

The red flag is a charge still showing as outstanding when the founder has just said, in the deck or the meeting, that there's *no outstanding debt*. That contradiction — self-declared story versus public record — is the exact pattern diligence is built to catch.

Why it usually isn't sinister — and why it still costs you

Most of the time the loan was repaid, but nobody filed the MR04 to mark the charge satisfied. So the debt is gone in reality and alive on the register. Harmless — except an investor can only see the register, and an outstanding charge affects the liquidation waterfall: in a downside, a secured lender is paid before the equity you're selling.

So the associate now has to stop and ask: is this live or just un-updated? That question, multiplied across a few such flags, is how a deal quietly loses its momentum — not through a single killer issue, but through an accumulation of *"let me just check that."*

How to fix it

• Pull your charges list from Companies House and check every entry's status.
• For anything repaid, file form MR04 to mark it satisfied — it's free and quick.
• For anything genuinely outstanding, disclose it up front with the balance and terms, so it's a known fact in the data room rather than a surprise.